34 F. 441 -

34 F1d 441

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Case Text

STEINES'll. MANHATTAN LIFE INS. CO.

441

borrow on the same terms as others. Taking advantage of her situation, complainant exapts from her this enormous interest, besides demanding a bonus of $300 on the ground of services in enabling: her to purchase the property ,and then, as soon, if not sooner, than the debt matured, sweeps the property off to a publie auction-house, where, as everyone knows it would be, it was sold at enormous sacrifice; so that this property, which at the time the loan was made is shown to have been worth $6,000, realizes only one-fourth that sum. Before doing this he has, according to his own testimony, received about one-third of his money back, and according to hers more than one half. Not content with that, he appropriates 320 acres of the debtor's land, and then, by attachment proceedings and sale, and with a singular and suspicious omission in the advertisement, obtains the title to a note fully secured,amounting, with interest, to more than half of the original loan, and, enforcing thereafter the trust deed, is now the owner of most valuable property. Has he not been paid in full, and more than full, for his original loan, and interest reasonable and unreasonable? May not a court of equity now stay his hands, and say, "Enough?" To grant to him the relief he now asks would be putting a court of equity and good conscience in the position -of giving to him an unconscionable profit upon an extortionate contract. I do not think that should be done. I have thus far considered this case 1l0lely from the standpoint of the complainant's rights, and have not noticep. the circumstances of the transaction as between the two brothers; nor is it necessary, in view of the conclusion reached upon the former ,branch of the case, to comment on the latter. For the reasons indicated a decree must go dismissing the bill.

STEINES

et al.

'II. MANHATTAN LIFE INS.

Co.

(Oircuit Oourt, E. D. Mi8aouri, E. D. March 26, 1888.)

1.

EQulTY-FRAUD-LACHES.

A bill in equity on a life insurance policy issued in 1854. alleging that at the time of the issuance of the policy the company agreed.to distribute the surplus every three years in interest-bearing scrip; that· in 1857 the .company fraudulently sent plaintiff a document which was simply a statement of a permanent addition to the policy, but which she, owing to her imperfect understanding of the English language, supposed to be a statement of the scrip; that she received similar documents in 1860, 1863, and 1866. tho true nature of which she has only recently learned; but which fails to set out a copy of the policy, or the alleged documents, or that she remained ignorant of the English language after 1857,-fails to show grounds for equitable interference, after the lapse of so many years, and the consequent changed condition of the parties. A bill in equity by a married woman against an insurance company, alleg· ing that when the policy was issued the company agreed to to her a portion of its dividends: that she always paid the premiums until 1866, when, on account of her sickness, her husband was sent to pay them; that the agent of the companJ" procured him to sign an application for more

".t.

SAME-LACHES 01' MARRIED WOMAN.

, .FlroEIU':r.

,,··sur.ll.nee;wiJ.ich it wasagl'eedillio'uld 1;1Qt be binding on bel' until assented to of bei,:lgan for more insurance, it was a future of a permanent addition to the waivllr ):loliey; 'that she did bOt dilico<verthis fact until 1874; that she then requested the-company Dot tosend her any more premium notes, but the company still the notes, which she. continued to. sign and pay til11886,-fails to show for equitable TeUef; the wife being all the .time capable. by the lawofthe place where sheresWed,of making .contracts, and of maintaining an action on them. . ' .

In Equity. On demurrer to bill. P. T. Ledegerber, for complainant. Given. OampbeU, for defendant. In this case adetnurrerto the bilt was 'argued the other day. The f!iots are these: In ,18Mj'34 years 'ago, this complaina-nt insured the life of her husband for $2,000. The insured is sti111iving. She claims ,thatsbehas been defrauded by the wrongful conduct of the insurancecoD:lpaily in two, particulars: FirSt. She ,alleges that prior to the cdnt'tll.CtEihe received an annual report .from the insurance company, which report stated that Elv,ery three years the premium surplus would be 'distributed, to the insured, in scrip bearing an annual interestnot excee<1ing 6 per cent.; that instead of scrip the same might be converted into permanent insurance for life, without anyanhual premium; or applied to the annual reduction of the future prf;}'iDiums on thepolicy'j that relying upon that representation, she made a contract of insurance by which the company agreed to give her scrip. She does notset;out a .copy Of such contract, saying that it is immaterial, but alleges in terms that it provided for the issue of scrip; that in 1857 a document was sent to her,Qr), the . back of which was indorsed these words: "The Manhattan Life Insurance Company, Frederick Steines, bonus, 1857, policy No. 3063, $124;" and that, inasmuch as she imperfectly understdodthe English language, she at the time .supposed this was a statemeIlt.ofthe scrip to which she was entitled under the contract; that in 1860, 1863,1866, she received similar documents; that she has lately, on consultation with counsel, found that they were not pearing scrip, but Eiimply .of permaneQ.tadditions to the policy. She further alleges that the premium which she was calledupon to pay was899,wllichshe paid:bY' giving one-halfcash, and one-half in a note bearingcelitain interest; t,hJit she has annually, from that time on to the commencement of this suit, given a like note, and paid 1n cash )he otherb/tlf, aswell as the interest on the notes. Those notes. have accumulatt:id, so ,tbather last pllyment in cash .in the year 18'86' was ' 8148.38. '. 'Now, upon: these facts, the first thing to be noticed is this: that this policy, in its inception, and in its earlier history, was one burdensome to the defendant;,and likely to be profitable to the complainant. If the "Insured had died within the fir&t two o!' three years, the company, havipg received but two or three bundred dollars, would have been com, pelled to pay $2,000. Thirty,four years having run, by the repeated pay-

STElNF.SlI.MANHATTAN LIFE INS. CO.

443

ment of premiums on· her part and the 8ccumulationof interest-bearing notes the policy has become beneficial to the defendant, and burdensome to the complainant. One who, under these. circumstances, comes into a eourt of equity,charging a wrong on the part of the defendant in the ('larly history of the transactions, should make very clear the fact of the as well as her ignorance thereof. If, .when the policy was appar-antIy beneficial to her, she was content to permit many years to elapse before she complained, and the lapse of time has changed its pecuniary benefit, it is simply fair that her claim of wrong, as well as her ignorance of the wrong, should be made perfectly apparent. Now, it may be that when the policy is presented, it will disclose a statement of just the rights she received under it, and on the face of it may contain.a stipulation ex;pressed in clear and unmistakable language that she was to have a permanent addition to the policy: instead of the scrip mentioned in thereport which she read. If it does not, then she has failed to give a copy of anyone of those triennial statements sent to her. She says she reeeived documents indorsed with certain words, and gives the indorsements; but what was on the face of those triennial statements is omitted from the bill. Non constat but that upon the very face of each one was the clear and unmistakable affirmation of a permanent addition to the policy, instead of an interest-bearing scrip. She says that at the time she received the first, by.reason of an imperfect acquaintance with our language, and relying. upon the contract which she had made, she supposed that it was scrip. She does not tell us that that imperfect acquaintance with our language has continued, or that she did not in 1860 have perfect familiarity with it; so that, if she had read this triennial statement,she would have been clearly advised that it proposed not scrip, but a permanent addition to the policy. These omissions are important. They are fatal; because, as I said, she comes after the lapse of these many years, in that changed condition of the policy, to assert a wrong perpetrated 30 years ago. A further charge is this: She says that she herself paid the premium from year to year, until 1866, 20 years before the commencement of this suit, and that then,being ill, she sent her husband, the insured, to . to pay it; that the agent asked him to sign what the agent said was an application for more insurance,-a larger policy;-that he signed such application, the agent reading over what purported to be an application for such increased insurance, but at the same time said to the agent that he had no authority to bind his wife, and that it was distinctly agreed between them that it should not be binding until she had been informed and expreSSly assented to it; that, instead of its being an application for increased insurance, it was in fact a surrender of all claims for future dividends, in consideration of a single large dividend of four hundred and odd dollars in the way of a permanent addition to the policy; that she never assented to that, and never knew what had been done,. until 1874; that when, ill 1869, she failed to get a statement of the expected scrip, she made inquiry and was told by the agent that she would be entitled to no more scrip because her husband was over 68 years .of agp;

I'EDER.A.L REPORTER.

andspeknew no better until 1874, when she was informed that she had surrendered all claims to future dividends. When thus informed in 1874, she wrote to the company, requesting it to send no more notes toher. Notwithstanding her request the company continued to send out the notes, and she thereafter, up to 1886, signed the annual notes and paid the premiums. She also copies a statement from the annual report received by her before the policy was issued, which states that" when a policy is taken for life, and the yearly premium amounts to or exceeds forty dollars, one-half of each yearly premium for the first five yearsimay remain as a permanent loan at seven per cent. interest, so long as the premium is regularly paid; the same to be deducted from the amount insured, unless previously paid off or canceled by the policy." I do not see what particular force that has. It was a privilege given by thecoll1pany to the insured, to pay for five years one-half in cash and one-half in note. It certainly gave the company the right at the end of five years to insist upon full payment in cash. It may be that it gave her also a similar right to make full payment in cash if she had desired; and if thereafter, when the company sent these notes, instead of signing them she had sent the full payment in cash, and the company had refused to receive it, it might well be that she could maintain some action to compel its receipt. But instead of doing anything of the kind, she simply sent her request; and when the company forwarded the notes she signed them, and paid the mouey, and has been doing that for 12 years. Now, if it be true, just as she says, (and of course, on demurrer it must be taken as true,) that in 1866 the company wrongfully obtained from her husband, the insured, a surrender of her right to future dividends, it is clear that she was soon thereafter, in 1869, by the nonreceipt of any dividends, if not informed, at least put in possession of facts which should put one upon inquiry. The information which she says she then received,-that her, husband was over 68, and therefore there were no more dividends,-a moment's reading of the policy would have verified: or disproved. Be that as it may, in 1874 she knew the facts, and for 12 years was content togo on,leaving the policy in force, paying all that by its terms was calledforj and in 1886, 32 years after the policy was issued, and after she had paid the premiums during all these years, for the first time she· comes into court, and says,"1 have been wronged." Now, under the statutes of Missouri, a married woman was, at the time this policy was issued, authorized to contract for insurance. She alleges not that her husband, but that she, herself, made this contract with the insurance company; that she was the principal in the contract. The statute also provides that she may sue, though when she sues, it is true, her husband must join. It might be that, if a wife was under the full diflability of the old common law, so that she had no right to contract, and no right to sue, neither limitation nor laches could be imputed to her, and perhaps no estoppel; but giving the right to contract, and the right, qualified though it be, to sue, I think it must be held that estoppel will bind heJJ, and that limitations and laches will run against her. So, upon a bill filed after a lapse of 32 years, not showing,

BOLTZ V. EAGON.

445

that she was ignorant of the wrongs, but, on the contrary, by plain implication showing that she must have been familiar with the one wrong nearly 30 .years ago, and absolutely showing that she was informed of all the wrongs more than 12 years before she br01\ght the suit, it seems no more than justice to hold that as against her, as against any other contracting party, the doctrine of laches must prevail. This is one of those cases where the insured has. lived a great, perhaps an unexpected, length of time; and the policy, which in the inception was one beneficial to her and prejudicial to the company, has, by the lapse of time, reversed its situation, and now the company has a contract which is benefioia;l to it, and which is prejudicial to her. Under these circumstancea, ,I think the demurrer should be sustained, and it is so ordered.

BOLTZ

v.

EAGON.

«(}lrcuit Court, E. D. Missouri, E. D. March 27,1888.)

J.

ATTACHMENT-PROPERTY SUBJECT TO-PROPERTY IN HANDS OF ASSIGNEE FOR BENEFIT OF CREDITORS.

Property in the possession of an assignee for tbe benefit of creditors under the Missouri statute is not exempt from seizure on a writ of attachment issuing from thE! fedetal court in a suit by a non-resident against the assignor.

S.

8.AME.-RIGHTS OF

Where property assigned as provided in tbe Missouri statute for the benefit of creditors has been seized under a writ of attachment issuing from the federal court. in an action by a non-resident against the assignor, the assignee may intervene in the attachment suit, and have his right to the property determined.

In Equity. On motion to quash a writ of attachment. Ellis, for plaintiff. Dyer, Bcmd& Mills, for intervenor. THAYER,J., (orally.) In this case a writ of attachment was sued out by the plaintiff on the 13th of March of the present year, and the writ was levied upon a stock of merchandise. On the 16th day of March, the marshal obtained an order of sale pendenw lite, and the property has been advertised for sale on the 28th of this monU).. On the 21st of March, G. Lehman filed an intervening petition in the case, representing that on the 8th day of March H. C. Eagon made a general assignment for the benefit of creditors to himself as assignee; that on the 9th day of March he took possession of all the property of Eagon, unq.er such assignment, and was proceeding with his duties as assignee, when all of the property covered by the assignment was taken out of his possession by the marshal, under the writ of attachment against Eagon. In view of these facts, the assignee asks to have the writ of attachment quashed, and the property released to him as ass.ignee for the purpose of administration under the state la w concerning assignments.